EurexUS, will it work?
- Thread starter tighttrigger
- Start date
For all you former LIffe floor traders let's remember that when Eurex cut their fees the Liffe sat on their hands.The Liffe did nothing to support the existence or the co-existence of the floor.Cbot and the Merc are taking steps to preserve the great tradition of open outcry so that there may be a chance for co-existence.The floor will be around for awhile yet.Whether it is around in twenty years,I don't know about that.
Jees, are you serious Tradeforchrist???? The only thing keeping EDollars on the floor is Bundles/packs and options. Technology will solve the bundles/packs as Globex/LIFFE improve algorithms as we speak. Plus market makers are already pricing these strategies on the screen. Optionns will be driven to screen by competition, if allowed to be fair, and market efficiency. As for CBOT the only thing keeping fixed income on that floor is note/bond options. If the dinasours at CBOT wont let that go on screen due to bizare rules then competition will drive options to Eurex US, a possible catalyst for more futures as well.
Eurex USA is starting out slow. At the CBOT, most (in the know) believe this is intentional. as they are just now getting broad european approval. TT is helping things along with their order routing tool allowing the splitting of orders for fixed income between exchanges.
Eurex USA's big advantage in the bonds is the half tick. Speaking as someone who was at a trading at a desk in the CBOT watching all this stuff develop. In my opinion, EUREX USA knew that the CBOT would get aggressive and competitive with pricing. They also new that traders are not going to take business away from the CBOT to save a few cents (at least not overnight). They also know and so does everybody else (esp. out east and among institutions) that traders will line up to take business away from the CME to save a nickel. Many traders (esp institutions) resent (probably more appropriate to say loathe) what they see as the greedy gauging by the CME.
Notice the CME and CBOT have done something no one has ever seen ---they brought exchange fees down. This of course was not by choice. In my opinion, the real attack by Eurex USA will come against the CME. They will bring out the Russell 1000 and 2000 (they are now licensed for this by Russell) contracts and try to give it sick liquidity through their european counterparts (ie german and dutch insurance companies brokerages etc ---they are going to use the "bund" model as they call it).
I do not know how all this will turn out. I have no ax to grind against any exchange. Except that competition should be good for us traders.
When Eurex USA starts gaining momentum with their common clearing link and they let all the Eurex german products trade here during the day. Well that will start to get very interesting. Many in Chicago believe that they have weathered the storm. Well maybe the Cbot has weathered part of the storm. In my opinion, this is just begining for the CME.
Eurex USA's big advantage in the bonds is the half tick. Speaking as someone who was at a trading at a desk in the CBOT watching all this stuff develop. In my opinion, EUREX USA knew that the CBOT would get aggressive and competitive with pricing. They also new that traders are not going to take business away from the CBOT to save a few cents (at least not overnight). They also know and so does everybody else (esp. out east and among institutions) that traders will line up to take business away from the CME to save a nickel. Many traders (esp institutions) resent (probably more appropriate to say loathe) what they see as the greedy gauging by the CME.
Notice the CME and CBOT have done something no one has ever seen ---they brought exchange fees down. This of course was not by choice. In my opinion, the real attack by Eurex USA will come against the CME. They will bring out the Russell 1000 and 2000 (they are now licensed for this by Russell) contracts and try to give it sick liquidity through their european counterparts (ie german and dutch insurance companies brokerages etc ---they are going to use the "bund" model as they call it).
I do not know how all this will turn out. I have no ax to grind against any exchange. Except that competition should be good for us traders.
When Eurex USA starts gaining momentum with their common clearing link and they let all the Eurex german products trade here during the day. Well that will start to get very interesting. Many in Chicago believe that they have weathered the storm. Well maybe the Cbot has weathered part of the storm. In my opinion, this is just begining for the CME.
Finally a well thought out response. I couldn't agree with you more. Keep it up TGM, we need more like you around here. There's a bunch of frickin' morons out here (Hi Def!). Look forward to hearing more from you. I was beginning to think I was the only one out here with anything intelligent to say. You have restored my faith in mankind.
Welcome aboard the ET fun ship
From the Eurex US website:
Sep 01 2004
Trading volume on Eurex US, the fully-electronic U.S. futures and options exchange, continues to grow, with monthly trading volume in August reaching over one million contracts for the first time. In August, trading volume on Eurex US rose 56 percent to total 1,047,283 contracts, up from 673,180 contracts In July and up 1,800 percent from 58,134 contracts in June.
Sep 01 2004
Trading volume on Eurex US, the fully-electronic U.S. futures and options exchange, continues to grow, with monthly trading volume in August reaching over one million contracts for the first time. In August, trading volume on Eurex US rose 56 percent to total 1,047,283 contracts, up from 673,180 contracts In July and up 1,800 percent from 58,134 contracts in June.
Quote from traderbambu:
EurexUS is working on offering futures/options on contracts like crude oil, gold, currencies etc. An announcement will be made in the near future.
Can you quote any sources for this info.
If EurexUS starts doing physical commodities, I think there are thousands of traders, esp. of NYMEX markets, who will switch to them immediately.
As soon as EurexUS starts offering Russel indices, we're going to see CME fees go lower than the absurd $2.30 per contract.
Meanwhile, it's rape and pillage time for NYMEX.